Jerusalem (CNN)Israel's parliament has passed controversial legislation that aims to legalize about 3,000 housing units built on private Palestinian land in the West Bank.

Many of the housing units are in what are known as outposts, small settler communities established without Israeli authorization. The new law, passed Monday in the Knesset, Israel's parliament, offers Palestinians compensation for their loss of the land.

The vote was 60 in favor and 52 against the so-called "Regularization Law."
Government Minister Miri Regev of Prime Minister Benjamin Netanyahu's Likud party called the bill's passage "a historic move."

"This is the first step towards complete regulation, namely, applying Israeli sovereignty over Judea and Samaria," Regev said, using the biblical name for the West Bank.

The new law is widely expected to be appealed to the Supreme Court on the grounds the Knesset does not have the authority to legislate property issues on land that is not part of Israel. Under international law, all settlements and outposts are illegal because the West Bank is considered occupied territory, though Israel disputes this.

Israeli nongovernmental organization Peace Now, which campaigns to promote peace between Israelis and Palestinians, said it will appeal the law.
"The law of regulation is a mark of disgrace for the Knesset, and one person above all has his name on it: Benjamin Netanyahu, who leaves the fate of Israel in the hands of a radical minority, and who supports a law that he and his attorney general have warned against," Peace Now said.

"Benjamin Netanyahu is willing to allow land theft to endanger IDF officers, and to drag Israel to the International Criminal Court in the Hague, all in the name of political survival, and under the pressure of interrogations. In light of this insanity, we will act as the responsible adult and will block this dangerous law in the Supreme Court."

WH: New or expanded settlements 'may not be helpful in achieving' peace
Members of the Palestinian Liberation Organization denounced the law, calling it legalized "land theft" and accusing the Knesset of breaking international law.

"Such a law signals the final annexation of the West Bank. Not only does it attempt to retroactively legalize the settlements and outposts built on Palestinian private property, it also gives clear license to the settlers to embark on a land grab in the occupied West Bank with impunity," Executive Committee Member Dr. Hanan Ashrawi said in a statement.

"All settlements are illegal, whether on private property or on state land that belongs to the Palestinian collective as a whole."

Ashrawi called on the United States and the European Union to put an end to Israel's "lawlessness" and "system of apartheid."

"Despite being a captive people under occupation, we will resist such expansionism and oppression, and we will continue to pursue all diplomatic and legal channels to oppose Israeli violations and defend our people's right to self-determination, justice and freedom."

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